Read the "Governing Documents" for that corp.
1. Articles of Incorporation
2. By-Laws
If individuals follow these then they are a true corporation.
If individuals do not follow these then they are out on their own.
Stock holders are just that. Stock holders are owners, but unless officers.
. . . .
Board members unless otherwise allowed can only act when there is a meeting.
But usually can by resolution authorize an expenditure. BUT usually cannot
just because they are a board member, but it happens all the time. Not good
or usually an authorized expenditure until approved as such by the board in
a meeting.
CEO, Authorized agents and managers can spend corp money.
In small corps it usually is all mixed together like in a pot of stew.
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On
Behalf Of Micheal Moser
Sent: Sunday, September 23, 2001 9:22 AM
To: [EMAIL PROTECTED]
Subject: Way off Subject - what do you know about a U.S. corporation
Apologies in advance for this misuse of the List. I was hoping someone
would be checking the List on a Sunday that might have some personal
knowledge of corporate structures and be able to answer couple of simple
questions. (simple if you know the answer!) I wouldn't bug the List but I
need some validation/verification on Monday and thought that someone might
be a corporate officer with more knowledge than I (which wouldn't take
much) and be able to help. Please respond privately so as to not impact
the list traffic any further. Thanks.
Please respond to: [EMAIL PROTECTED]
Obviously I'm not an attorney but I need to have a better understanding of
the following issues. I know that laws may vary state to state, and the
opinions that I get may not be from attorneys either, but a general idea
of what is considered "normal" will help.
1. In a corporation, what provides the authority for an individual to
obligate the corporation financially? ie.
a. Owners (or stock holders) are authorized by the fact that they are
owners? (I don't think so, but I'm not sure.)
b. Board members are authorized because they are Board Members. (again, I
don't think so, but I'm not sure.)
c. The Board normally specifically bestows the authority on to specific
individuals in the organization (i.e CEO, CFO, etc) and grants such
authority to others through approved policies and procedures (ie. a
purchasing department and purchasing procedures.) - (I think this is
probably the case)
d. some combination of the above.
2. In a corporation, assuming that the corporate vail holds, which
individuals, if any, can be held responsible for the corporate
liabilities? I think the answer is "current board members" but again I am
not sure.
I am sure that there are thousands of answers to the above given different
scenarios but I am just looking for the "normal and usual" situation.
Thanks for any feed back and I understand that any such feed back is not
Legal Advice.
Thanks again,
Michael Moser
